Question

Bellucci Corporation has provided the following information:Cost per Unit Cost per PeriodDirect materials $ 6.85 Direct labor $ 3.80 Variable manufacturing overhead $ 1.35 Fixed manufacturing overhead $ 108,000Sales commissions $ 1.30 Variable administrative expense $ 0.65 Fixed selling and administrative expense $ 39,150The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to:____________.

Answer 1

$12

Step-by-step explanation:

Total Manufacturing Cost at 9,000 units:

= Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead

= ($6.85 per unit × 9,000) + ($3.80 per unit × 9,000) + ($1.35 per unit × 9,000) + $108,000

= $61,650 + $34,200 + $12,150 + $108,000

= $216,000

Total Manufacturing Cost at 9,001 units:

= Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead

= ($6.85 per unit × 9,001) + ($3.80 per unit × 9,001) + ($1.35 per unit × 9,001) + $108,000

= $61,656.85 + $34,203.80 + $12,151.35 + $108,000

= $216,012

Therefore, the incremental manufacturing cost:

= Total Manufacturing Cost at 9,001 units - Total Manufacturing Cost at 9,000 units

= $216,012 - $216,000

= $12